UDG Healthcare sells Aquilant after share drop

Sells the business for up to €23m to private equity firm

Marking a exit from the last of its lower margin businesses, healthcare services provider UDG Healthcare has sold its medical solutions arm Aquilant.

Aquilant - a specialist medical, pharmaceutical and scientific products distributor serving clients based in the UK, Ireland and the Netherlands - represented approximately just 4% of UDG Healthcare’s operating profits from October to March this year.

“The sale of Aquilant is consistent with the group’s strategy to focus on its higher growth, higher margin international healthcare services businesses.”

The Basingstoke-based business was sold to European private equity firm H2 Equity Partners, which offered a cash consideration of up to €23m with an initial €20.5m in cash and a further €2.5m subject to gross profit results.

Proceeds from the transaction will be funding the continued development of the group’s high-margin divisions, Ashfield and Sharp.

Out of UDG’s three divisions, Aquilant was by far the smallest and during a trading update announced earlier this week, the group said that the business was “well behind” compared to its position last year due to contract losses.

Shares in the company then plummeted by more than 10% after the group identified this weakness.

It’s not all bad news for the group however, as its communications and advisory arm Ashfield performed strongly due to a series of seven acquisitions from the past two years coupled with underlying growth.

Overall, trading in Ashfield was well ahead compared to the same quarter last year.

Sharp also delivered similar results, presenting double digital operating profit growth ahead of the same quarter last year. This was driven by a strong performance in Sharp US.

The group said it is on the lookout to execute further strategic acquisitions to complement its existing growth platforms.